OPEC+ Sticks to Existing Deal Despite Price Rally

OPEC+ Sticks to Existing Deal Despite Price Rally

OPEC+ agreed on Thursday to another modest monthly oil output increase, arguing that the producer group could not be blamed for disruptions to Russian supply and saying China's coronavirus lockdowns threatened the outlook for demand.

Ignoring calls from Western nations for accelerating output hikes, the group agreed to raise its June production target by 432,000 barrels per day, in line with an existing plan to unwind curbs made in 2020 when the COVID-19 pandemic hammered demand.

In March, crude prices hit their highest since 2008 at more than $139 a barrel after Russia’s invasion of Ukraine exacerbated supply concerns that were already fueling a rally. Benchmark Brent crude traded above $111 on Thursday.

Two sources present at the meeting said delegates completely avoided any discussion about sanctions on Russia, wrapping up talks in near record time of just under 15 minutes.

“OPEC+ continues to view this as a problem of the West’s own making and not a fundamental supply issue that it should respond to,” said Callum Macpherson from Investec.

The United States has repeatedly asked OPEC to raise production, but the organization has resisted the calls.

OPEC Secretary General Mohammad Barkindo, in a speech seen by Reuters to a meeting of the OPEC+ Joint Technical